The ATP-coupled activation of NEDD8 that is required for subsequent charging of the NEDD8-specific E2 UbcH12 is catalyzed by heterodimeric APPBP1-Uba3 in humans. The enzyme catalyzes the activation of the C-terminal carboxyl group of NEDD8 by forming a high-energy thioester bond in an ATP-dependent manner. Uba3 shows 43% homology to the C-terminal half of the ubiquitin activating E1 enzyme Uba1. The Uba3- catalyzed activation of NEDD8 exhibits an absolute requirement for APPBP1 which has high homology to the N-terminal half of Uba1.